Mca, Viacom File Suits In Dispute Over Usa Network

UNIVERSAL CITY, Calif. - — MCA and Viacom are suing each other over their USA Network partnership, with each claiming that the other damaged the nation's biggest cable television network.

In a lawsuit filed in Delaware, MCA said Viacom violated their partnership agreement by keeping MTV and Nickelodeon independent from their USA Network venture. MCA asked the court to force Viacom to sell its cable channels or shed its 50 percent of USA Network.

Viacom, parent company of Fort Lauderdale-based Blockbuster Entertainment, quickly filed its own lawsuit in Delaware, seeking relief from the suit and "from MCA's conduct harming their USA partnership."

The lawsuits culminate two years of negotiations over control of the cable channels, which have become a large part of the revenue dollar for their parent companies. It also comes the day Viacom introduced a new channel for vintage reruns called Nick at Nite TV Land. (In South Florida, only TeleMedia of Boynton Beach has confirmed that it will carry TV Land.) "Domestic basic cable networks are so valuable that any time a dispute arises like this, the parties are going to play hardball," said Dave Davis, an analyst with investment bank Houlihan & Lockey.

The companies are no strangers to such tactics. Four months after firing Viacom Chief Executive Frank Biondi, Viacom Chairman Sumner Redstone released Biondi from his non-compete contract. That move permitted Biondi to become MCA's chairman and chief executive.

MCA said it had been negotiating a resolution to violations of its partnership since Viacom acquired Paramount Communications in 1994. USA Network, which has 67 million subscribers, was founded in 1980 by Chairman Kay Koplovitz.

"Both at the time of the Paramount acquisition and following the announcement of the TV Land launch, Viacom was notified that its conduct violated the intent and spirit of our joint venture agreements," said Karen Randall, MCA senior vice president and general counsel.

MCA said a clause in the agreement it originally signed with Paramount prevented Viacom or MCA from starting a cable channel outside of the partnership. MCA said it had kept its side of the bargain.

Last year, MTV, USA Network and Nickelodeon had a combined cash flow of $476 million, according to Paul Kagan & Associates, a consulting firm. Viacom had 1995 cash flow of $2.3 billion.

Viacom intended to further capitalize on cable channels by starting Nick at Nite TV Land, a spinoff of Nickelodeon.

Viacom said MCA promised to waive its claim on TV Land and other MTV networks if Viacom released Frank Biondi from his contract.